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were adequately disclosed on the return. See sec. 6661(b)(2)(B).
If an understatement is attributable to a tax shelter item,
however, different standards apply. First, in addition to
showing the existence of substantial authority, a taxpayer must
show that he reasonably believed that the tax treatment claimed
was more likely than not proper. See sec. 6661(b)(2)(C)(i)(II).
Second, disclosure, whether or not adequate, will not reduce the
amount of the understatement. See sec. 6661(b)(2)(C)(i)(I).
Substantial authority exists when “the weight of authorities
supporting the treatment is substantial in relation to the weight
of the authorities supporting contrary positions.” See sec.
1.6661-3(b)(1), Income Tax Regs. Petitioner argues that no
authority, other than the statute itself, existed at the time she
claimed the loss. Lack of authority, however, necessarily cannot
provide the substantial authority required under the statute and
regulations.
Adequate disclosure may be made either in a statement
attached to the return, or on the return itself, if it is in
accordance with the requirements of Rev. Proc. 83-21, 1983-1 C.B.
680. See sec. 1.6661-4(b), (c), Income Tax Regs. Nothing in the
record indicates petitioner attached a statement to her 1982
return. Rev. Proc. 83-21, applicable to tax returns filed in
1983, lists information which is deemed sufficient disclosure
with respect to certain items, none of which are involved in this
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